Chinese culture is often opposite to American culture. Probably the greatest difference lies in the practice of being humble.
In China, people do not boast about themselves. It is considered common courtesy to deny complements and offers of assistance prior to accepting them, and as a result, criticism must be delivered differently than it is in the States.
Examples of Chinese complements and denials of flattery exist everywhere in the country. On my first day in China I picked up simple sentences like "hello, my name is Ben", "thank you", "how much does that cost", etc. Upon uttering these simple sentences I often was told "Wow, your Chinese is very good!" This was decidedly not the case. I was mis-pronouncing words and speaking with a heavy Minnesota accent. I didn't know how to properly use the tones. My Chinese was possibly the worst they had ever heard.
That was in 1994. By 1999 I was pretty much fluent in Chinese. All through the stages of development and learning, I was told my Chinese was excellent. To this day, it is difficult to gauge the sincerity of the complementor.
One thing that changed between 1994 and 1999, however, and continued to change as I learned more about the culture, was my own response to such complements. It is considered normal in China to exchange complements with one another as an ice-breaker. "Your Chinese is very good." "Your wife is very beautiful." "Your son is obviously very smart." The expected response is not, "Yes, I am aware of this, thank you", but rather very humble. One is expected to mention being lucky to have a son, or happy that their wife agreed to marry them, or to say, "No, my Chinese is not very good, I still have a long ways to go".
When I would visit Chinese friends that I did not know well, they would bring out a bowl of fruit or some other snack to eat while we drank tea and talked. They would always ask me to please have an orange or an apple. I would politely decline and state that I was not really hungry for food, but for conversation. They would leave the bowl of fruit on the table anyways. Then we would sit and talk and whether or not I was hungry, I always ate something. It was the right thing to do. The host was happier when I peeled an orange. But I never ate all that was there.
Many Chinese conversations begin with an apology. This is nearly the opposite of American culture. Often times if a conversation begins with an apology, you are about to be told you have made a mistake. The reason for the apology is to soften the blow of the criticism. It's an unspoken warning of what is to come, a way of telling you to prepare yourself. Often times, to smooth things over even further, the recipient of the apology may want to state that there is no need to apologize, and that their input and guidance are valued and as friends we can speak frankly with one another. Once these formalities have been taken care of, the two parties can speak more directly about their concerns and how to resolve issues.
In my most recent job as a residential loan officer, my boss would come into our close-knit department and sit down at the cubical of whomever she needed to discuss something with, and if it was not a private or personal matter, she would just say what was on her mind loud and clear. It was a great way to let the offender know that they needed to keep their client pipeline current, and a great way to make it clear to everyone else that they'd better clean up their own pipelines or they'd be next. It was a highly effected form of management and resulted in quick communication to the staff just what was expected.
This approach would not only be ineffective in China, but it would backfire, cause morale to plummet, and cause the recipient of the criticism to lose face and be publicly embarrassed. Had we been at a Chinese company, my boss would have called me into her office or a private meeting room, then sat down and apologized for having to take my time away, and probably waited a moment for me to say something like "please, do not feel bad, I need to have your guidance in order to better do my job". Then we could get down to business and I would be told my pipeline needed to be cleaned up.
All of this apologizing in no way suggests that the Chinese lack self-confidence. Egos and personalities of all varieties can be found in any country, regardless of political system, wealth and culture. China has five thousand years of history. They are a high-context, indirect society with long-established rules of communication. Direct orders are not given quite so often. Public scoldings are reserved for only the most egregious of errors. Complements, though regularly handed out, are always received with a humble reply of "no, you are much too kind".
It is important from a management perspective to understand how to be gentle when beginning a conversation with a colleague from China who does not understand American culture. One must make them feel comfortable in their environment and at ease before being frank. Otherwise they will close up and be embarrassed, and may start looking around for other employment. Giving direct orders to employees in front of others causes morale to plummet. It creates a working environment that produces less, becomes listless.
Being humble and spending time on Guanxi, or relationships, are two of the most important aspects of Chinese culture to understand before proceeding with a business initiative in China. If you've put in the time to get to know your Chinese employees, colleagues, business partners and official contacts on a personal level through social outings and dinners, you'll be able to more easily address issues paramount to the operation of your business. You will already know each other and be committed to a long term relationship, whether or not you've signed a contract to cooperate. The Chinese are more respectful of a person putting in the time to get to know them than they are of a stack of papers outlining each person's responsibility. That is changing as China delves further into the global marketplace, but one thing that remains the same is the importance of spending time building relationships. Going to China a few days before a big business meeting to meet socially with potential partners might cost a little more and take more time, but it will save thousands in the long run if the relationship is appropriately maintained.